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patent infringement. Yet, the Public Counsel is given the right to intervene in private infringement actions (Sec. 24; Sec. 3(d) (4)). This seems an unnecessary burden to the present adversary system. It could only result in greater costs in patent litigation which already is an extremely expensive proceeding. Adversary procedures within the Patent Office can be established without creating a need for the Public Counsel.
The Public Counsel, presumably in his role as advocate of the public interest and in his role as public prosecutor, is assigned the duty of considering and reviewing all proceedings in the Patent Office (Sec. 3(d)). He may be called in at any stage by the Primary Examiner (Sec. 132(a)), and he has the right as a "party" to inform the Commissioner of relevant prior art. It is our belief that it would be necessary for the Public Counsel to have his own examining. staff to conduct searches for relevant prior art and to review the work product of the existing Examining Corps if he were to hope to carry out these duties. It is strongly urged that this would amount to the creation of a bureaucracy within the Patent Office which would, in large part, parallel and overlap the existing functions of the Patent Office itself.
Because of the inherent conflicting roles designed for the Public Counsel, because of the potentiality for the Public Counsel to insert his office into existing adversary proceedings, and because of the potentiality for the creation of bureaucracy within the Patent Office to duplicate and oversee the performance of duties which are to be carried out under statutory command by other staff of the Patent Office, we are opposed to the creation of the Office of Public Counsel.
If, as has always been assumed, it is the duty of the Commissioner of Pat. ents to insure to the extent possible that high quality patents issue from the Patent Office, it is unnecessary to create a separate office to perform that function. If the Commissioner of Patents has been unable to insure the issuance of high quality patents it is not seen how it is possible that the mere addition of an Assistant Commissioner of Patents will improve the track record.
RESOLUTION NO. 3
(Establishment of a system for deferred examination of patent applications) BE IT RESOLVED: That the Milwaukee Patent Law Association considers implementation of a deferred examination system as proposed in S.1321 to be premature and therefore, opposes at this time the deferred examination system proposed in said Bill; and further, that the Milwaukee Patent Law Association urges modification of the publication of Section 122, S.1321 in order to be consistent with publication requirements of foreign patent systems and proposed international patent schemes; and further, that the Milwaukee Patent Law Association urges modification of the term in Section 153, S.1321 to be twenty years without exception. Supporting memorandum
Consideration of the proposed deferred examination of patent applications as proposed in S.1321 inherently involves consideration of the proposals in that Bill for publication and term of the patent.
While the Milwaukee Patent Law Association does not oppose the concept of a deferred examination system, it seems wise to take advantage of information and experience for such a proposal before its implementation. Such information and experience can best come from countries who have recently adopted a deferred examination system—but there has been insufficient time to permit proper evaluation of these systems. Hence, the objection to the deferred examination system.
S.1321 suggests publication six months after filing of the application. Especially because the recently revised patent systems of the world and proposed international patent systems would call for later publication, generally eighteen months after filing, it seems only prudent to adopt a publication time table which is consistent with other patent systems of the world.
S.1321 proposes a term of twelve years for the patent with provisions to extend that term for any deferral for examination or secrecy. Rather than provide for such extension of the term for specific fact situations which inher. ently involve certain discrmination and motivations inconsistent with the patent system, it is urged that a fixed term of twenty years from the date of filing be adopted.
RESOLUTION NO. 4
(Revision of the patent fee schedule, including the establishment of mainte
nance fees) BE IT RESOLVED:
That the Milwaukee Patent Law Association is opposed to the establishment of a system of fees for the maintenance of U.S. patents on the grounds that they will create a substantial additional burden on the owners of patents and thus tend to discourage the making of inventions, the publication of the same through the patent system, and their ultimate utilization.
FURTHER RESOLVED: That this Association disapproves the maintenance fee provisions of Senate Bill S.1321, 93rd Congress, First Session, and particularly Section 41 thereof. Supporting memorandum
Section 41 of S.1321 would revise the patent fee schedule to include annual maintenance fees of not to exceed $100 for the first three years, and thereafter of not less than $1,000 per year increased by 25% each year for the life of the patent. Up to 80% of these fees may be exempted to benefit and encourage individual inventors and small businessmen. The revenue derived would be used to defray the cost of running the Patent Office and should result in lower filing and other fee charged by the Patent Office.
On its face, the proposition is appealing because only the valuable patents would be maintained and their owners could well afford to pay the fees. Poor patents would be dropped and would no longer clutter up the records. The greatest burden of fees would only fall after the patents had proved themselves successful rather than when applications are filed.
The basic proposition is not novel since most foreign countries have a graduated system of maintenance fees. This has irritated the U.S. owners of foreign patents, because the foreign owners of U.S. patents have no such burden.
The principal objection to such fees is the inordinate amount of time and expense in making intelligent decisions whether or not to maintain patents having unrealized potential. This can well exceed the amount of the fees. Serious mistakes can be made in dropping patents prior to an opportunity to exploit them.
The Bill cleverly proposes relief for the individual inventor and small businessman. It submitted this provision can give rise to more detriment in the form of abuse, improper favors and administrative expense (both to the Government and the inventor) than the evil it is designed to cure. The management of patents in a large corporation has become so decentralized that the segments involved, including the recent concept of venture managers of various research activities, is not much different than the individual inventor. While the corporation has the money to pay such fees, they simply add to the burden of financing research operations and will discourage the type of activity the patent system is intended to promote
Under the Paris Convention, it is believed that the relief granted individual inventors and small businessmen would have to apply to foreign as well as U.S. nationals. Since many communistic countries issue most of their patents (or inventor certificates) to individuals, our Government would obtain very little revenue from corresponding patents obtained in the U.S.A.
The proponents of the Bill may argue the purpose is not to increase the burden but to shift the burden because of the accompanying reduction in filing fees. If this was the only effect, it is still detrimental because it will encourage the filing on marginal inventions, thus adding to the problems of the Patent Office, and will tend to lower the quality and reliability of U.S. patents.
Experience has shown that new forms of taxation, while designed to relieve the burden in some other area, usually result in simply adding another burden. In this instance, the administration of the plan will add substantial cost to everyone concerned.
It should be pointed out that most foreign countries have either (1) no examination system of any consequence, or (2) such a system of examination that once granted, patents have a far greater presumption of validity. In either case, payment of annual fees may be justified as proper revenue producers for what the inventor is getting under their systems. It might be argued that a patent which has borne substantial maintenance fees should be better
treated than one that hasn't, but this 'smacks of paying for the patent privilege rather than having the patent judged on its merit.
The fee schedule proposed in S.1321 would involve a cost of nearly $20,000 to obtain and maintain a patent for its present 17-year life, assuming there was no deferred examination. For a company that obtained an average of 20 patents a year, the annual cost to maintain all such patents would be over $200,000. While the Bill also proposed to reduce the term of patents to 12 years, the fact that this would reduce the total fees by about one-half is small solace for the loss of patent rights involved. It is hard to conceive of any measure which would do more to discourage the making of inventions.
For the reasons discussed, it is believed that a patent maintenance fee program is undesirable.
RESOLUTION NO. 5 (Administrative restructuring of the Patent Office, including the proposed
establishment of the Patent Office as an independent agency) BE IT RESOLVED: That the Milwaukee Patent Law Association adopts the following Statement of Position with respect to those provisions of S.1321 that relate to or touch upon the administrative restructuring of the Patent Office, including the proposed establishment of the Patent Office as an independent agency. Supporting memorandum
Establishment of Patent Office as an Independent Agency.-The Milwaukee Patent Law Association, believing that Sec. 2 of S.1321 cannot, in and of itself, either contribute to or detract from attainment of the expressed objective “to assure that United States patents are of high quality and reliable,” takes no position on that specific proposal but recommends careful study of it with respect to such considerations as:
The status of Patent Office officials vis a vis their counterparts in foreign countries, having in mind the increasing importance and magnitude of international patent operations ;
Adequacy of liaison with Congress and with other Federal administrative agencies; Duplication of personnel and functions; and
Availability to the Patent Office of expertise for the solution of administra tive problems.
Availability to the Patent Office of expertise for the solution of administration.—The Milwaukee Patent Law Association opposes those provisions of S.1321 that would freeze, in statutory form, administrative practices which are now within the Commissioner's regulatory and discretionary powers and which therefore can now be readily changed to accommodate changing conditions. As specific examples :
Sec. 6(d) would mandate the Commissioner to maintain public search facili. ties “in various (unspecified) parts of the United States.” Such facilities would be costly if complete and of doubtful utility if incomplete ; but the Commissioner would have no discretion to discontinue all of them if their cost proved disporportionate to benefits from them.
Sec. 6(e) would mandate the Commissioner to further the improvement of information retrieval facilities without requiring a cost/benefit appraisal. Such development, coupled with such appraisal, is now inherent in the Commissioner's administrative authority.
Sec. 8(e) re-enacts an administrative detail that has been dropped from the earlier patent laws by the Patent Codification Act of 1952—
Imposition upon Commissioner of Burden of Fixing Fees Now prescribed by Statute.-The Milwaukee Patent Law Association opposes the principle of S.1321 insofar as it imposes upon the Commissioner the burden of fixing Patent Office filing, examination and maintenance fees and requires that such fees be calculated to recover a specified proportion of costs of Patent Office operations. Allowing the Commissioner to determine both the income and the expenditures of the Patent Office, without external supervision would be unwholesome. Whether fees are fixed from within the Patent Office or from outside it, the administrative problems of fee fixing under the proposed criteria would be complicated by the difficulty of predicting the income that would be realized from any particular fee schedule, owing to provisions in the bill
for discretionary exceptions to such fee schedule and for steeply graduated maintenance fee percentage increments. Furthermore, the need for changing the fee schedule from time to time, to accommodate changing Patent Office expenditures and fee receipts, would give rise to confusion in calculating, collecting and accounting for fees in particular cases.
Administrative Burdens Imposed by Substantive Provisions.—The Milwaukee Patent Law Association opposes certain substantive provisions of S.1321 for the reason that they would impose administrative burdens upon the Patent Office that would not “assure that United States patents are of high quality and reliable." For example :
Sec. 112, in its several provisions requiring a complete exposition of the prior art, and particularly in its subsec. (d) (1), would require the examiner to ascertain whether the applicant had in fact set forth all that was known and conventional; and even assuming that the section is intended to require such disclosure only as to known and conventional art that is relevant (a qualification that does not appear in the section), the examiner would be required, in effect, to spend time on matters which, by their very nature, made no contribution to the advancement of the useful arts.
Sec. 122 and certain related provisions with respect to early disclosure may compromise national security by permitting inventions relating to advanced military equipment to be inadvertently published before sufficient time has passed for adequate evaluation by the defense agencies. The two month period for such evaluation provided for in Sec. 181(b) is unrealistically short. Even with a longer period, the need for expeditious handling of patent applications containing such subject matter would be disruptive to Patent Office routine.
Sec. 132(c), in requiring that “all decisions by a primary examiner” be accompanied by the equivalent of a judicial opinion, would materially increase the work load upon the Examining corps (thus increasing an already overwhelming backlog) without achieving any offsetting gain to the public or patentees.
THE MILWAUKEE PATENT LAW ASSOCIATION APPROVED :
ARNOLD J. ERICSEN
President. I certify that the foregoing resolution was adopted by a unanimous vote of the members of the Milwaukee Patent Law Association at a regular announced meeting of the members of the association with a quorum of members present held on September 11, 1973.
Barry E. SAMMONS,
Patent Law Association,
Saint Paul, Minn., September 27, 1973. The Honorable JOHN L. McCLELLAN. Chairman, Senate Judiciary Committee, U.S. Senate, l'ashington, D.C.
DEAR SENATOR: We are concerned with several aspects of S. 1321, the bill to reform and revise the Patent Laws, Title 35 U.S. Code.
In introducing a similar bill (II.R. 7111) in the House in April of this year, Congressman Wayne Owens quoted with approval from the President's technology message to Congress in March, calling “a 'strong and reliable patent system' an important predicate to U.S. technological progress and industrial strength". He also stated it to be an objective of the act "to restore confidence in the patent system by increasing and strengthening the quality and reliabilits of the U.S. patent grant";. We agree with both of these propositions. But how they may best be attained is quite another question.
In this country we have never had opposition proceedings against the grant of a patent which are common in various other countries, e.g., the United Kingdom and West Germany. While we have had a limited provision for receiving protests to the grant of a patent and limited public use proceedings (Rules 291 and 292 of the Rules of Practice of the U.S. Patent Office), yet there has been no provision for publishing the application or laying it open to
public inspection prior to grant. It was only when one received legitimate knowledge of the pendency of an application (as in a priority contest or interference in the Patent Office or in a contract negotiation) that he was in a position to file a protest or initiate a public use proceeding.
We believe this country should come to some proceeding where applications for patents, if allowed, are then published and laid open to public inspection, to invite protests or oppositions; or, alternatively, a patent could issue forthwith the public could be given a period of time, e.g., six months to lodge nullity proceedings, following which the claims might be revised or recast, much as is now done in reissue patents.
You will note that we do not propose that the public be allowed to participate in the examination process until claims have been allowed, viz., the Examiner finds the application in condition for allowance.
Former Commissioner of Patents Robert Gottschalk, as a first step in a procedure to increase the quality and reliability of patents, recommended a change in the Rules of Practice to provide for voluntary proceedings to permit protests to the grant of patents. That is, an applicant would be given the opportunity to open his application to public inspection prior to the issuance of a patent, to allow competitors or other members of the public the opportunity to protest the grant of a patent and to cite prior_art, publications, etc., believed to have been overlooked by the Patent Office. Proposed changes in the Rules to implement this proposal were published in the Official Gazette of the U.S. Patent Office on June 19, 1973, by order of the Commissioner of Patents, with the approval of the Assistant Secretary of Commerce for Science and Technology. A hearing is scheduled in the Patent Office on this proposed rule change on October 31, 1973.
This innovation in the practice, if actually promulgated, would offer a revealing proving ground. In his address to the American Patent Law Association meeting in Saint Paul on May 10, 1973, Commissioner Gottschalk said:
“It is our hope that the experience gained with this practice may well be the forerunner of legislation along the same general lines; ... [but
applicable] to all applications." The Hart bill, S. 1321 (and likewise the Owens bill, H.R. 7111) contains such a drastic proposal for increasing the quality and reliability of patents as to defeat its stated objective.
Sections 122 and 135 of the Hart bill would provide for laying an application open to public inspection and copying (unless it was vital to national security under Sec. 181) promptly after it is filed and “prior to the date of first examination". That is, before there was any decision by the Examiner that any patent should issue or, if so, what scope of claims the applicant was entitled to in the Examiner's opinion, the applicant could be burdened with premature and perhaps wholly unnecessary protests. Additionally, the fact that a competitor could immediately get access to an application-whereas todar applications are maintained in confidence (Sec. 122 of 35 U.S. Code) — would dissuade many inventors from filing a patent application or otherwise publicizing their inventions.
Laying open to public inspection eighteen months after filing is the earliest exposure of an application to the public in any major industrial nation, e.g., Germany, France, the Scandinavian countries, etc.; and the quid pro quo for that disclosure is the vesting of certain rights in the applicant. In the United Kingdom there is no laying open until acceptance, i.e., 212 years or more after filing.
So we are very much opposed to Sections 122 and 135 of the Hart bill. S. 1321.
The Hart bill also proposes the new office of "Public Counsel": see Sections 3(d), 24. 132(a), 134(a), 142, etc. The Public Counsel could “intervene and participate at any time in any Patent Office proceeding" and would be “independent of the Commissioner" (Section 3(d) (1)). It would be the Public Counsel's duty to assure that only "high quality patents ... issue from the Patent Office" and "To that end he shall consider and review all proceedings in the Patent Office" (Sec. 3d). Section 3(d) also indicates that he would have "dele. gates". His delegates would necessarily be very numerous if he followed the aforesaid mandate. Indeed, the office of Public Counsel might rival the size of the present Examining Corps of the Patent Office; and, if the office of Public Counsel did what the bill provides, there would in effect be a separate examining corps in that office. And what reason would we have to assume that they